I Want to Understand Why Gas Prices are So Damned High

this is a discussion within the Everything Else Community Forum; Originally Posted by Crusader
We pay about $8 per gallon in Sweden right now. Our taxes on gas are really high. But I went trough college for free and don't pay much for healthcare so I'm pretty happy about it.
...

We pay about $8 per gallon in Sweden right now. Our taxes on gas are really high. But I went trough college for free and don't pay much for healthcare so I'm pretty happy about it.

Originally Posted by saintfan

Taxes will be that high here eventually.

... of course, we'll somehow miss the boat on the 'free college education' and 'discounted healthcare' while any new, additional taxes will be applied directly to bailing out another 'too big to fail' company, another Wall Street crisis or some other misguided Congressional bull**** ...

OK, Professor Oil, now I know I am dealing with someone with at least a cursory knowledge of the subject. Not bad. So, you are saying that Obama ISN'T the cause of high gas prices? Huh. I guess you are going to tell me he ISN'T a Muslim and that evolution is, scientifically speaking, fact. OK, maybe that's going too far.

As to the role of speculators, they only magnify the speed and size of the price movement, but not the direction. As your Econ 101 professor taught you, when demand outstrips supply.....price will go where? That's right, it will go up. Where have gasoline prices gone over the last 40 years?

Originally Posted by saintfan

I'd like to suggest to everyone that there is no shortage of oil. Read it again. There is NO SHORTAGE of oil. There is less now than there was 100 years ago of course, but supply has adequately paced demand and will continue to do so. There is plenty of untapped oil in the world when the liberals decide they need it.

Shame on you SaintFan for not telling these good people the truth. We are headed for higher and higher gasoline prices because consumption of oil is outstripping supply.

But, there are three main areas that you did not cover, which I have outlined here:

1. Peak Oil Happened in 2008

For all of you who know that oil is a finite natural resource, meet me at the next paragraph. For those of you who believe in biblical-based oil, please see this article and I'll pray for you.

In 2008, the world consumed 5.3 million barrels more oil than it produced. That was a shortfall equal to the daily oil production of Kuwait and Iraq combined. By 2035, the projected shortfall will be 12.1 million barrels per day -- which is more than all the oil produced by Saudi Arabia per day.

In 1956 M. King Hubbert, a geologist for Shell Oil, predicted the peaking of US Oil production would occur in the late 1960s.
Although derided by most in the industry he was correct. He was the first to assert that oil discovery, and therefore production, would follow a bell shaped curve over its life. After his success in forecasting the US peak, this analysis became known as the Hubbert's Peak.

The amount of oil discovered in the US has dropped since the late 1930s. 40 years later, US oil production had peaked, and has fallen ever since.

World discovery of oil peaked in the 1960s, and has declined since then. If the 40 year cycle seen in the US holds true for world oil production, that puts global peak oil production, right about now; after which oil becomes less available, and more expensive.

Originally Posted by saintfan

And no, drilling more North American Oil isn't going to lower the price of a gallon of gas enough to make a difference. Who Dat Cat can relax. LOL

Originally Posted by saintfan

Did you know that when an oil company refines its gasoline, that the margin for profit for the oil company is, give or take, 80 cents a gallon? Bet most of you didn't know that. The media is stupid, or at least ignorant. It is expensive to locate and drill and transport and refine the stuff. Oil companies make a LOT of money. They spend a lot too...

In 2010, total oil, gas and coal subsidies to fossil fuel Big Energy was $15 BILLION. That's billion with a "B". Below are just a few of the tax credits and subsidies that these companies took advantage of. At the same time, ExxonMobil, in 2010 -- made $30.46 billion in profit!@!@#%^! That is just pure PROFIT.

If you are worried about the U.S. federal debt, call your US representatives and demand that these tax loopholes and subsidies to Big Fossil Fuel be CLOSED immediately.

So, we are all familiar with the real estate bubble. Something very similar happens with commodities. It's all a bet really. Speculators have created a gas 'bubble'. In fact many speculators involved in real estate a few years ago moved to the oil industry. You betcha Betsy...

But adding more refineries won't fix Wall Street, and Wall Street boys and girls is why you are currently paying 4 bucks a gallon ...

Originally Posted by saintfan

Oh and that oil we get from Canada? It is uber-expensive to refine.

Remember though that speculators - the smarts ones - make money going up and going down. ... it is the Wall Street speculators who make the most difference. The fuel that pushes economies all over the world is subject to the many times knee-jerk reaction of Wall Street.

Should it be regulated? Absolutely. Is there a politician alive today with a pair big enough to do anything about it?

Yes, there are politicians who fight Wall Street. Obama is one of them. But, that is a different topic.

For those of you who believe that global warming is a hoax, please keep your head placed firmly up your @ss.

For the rest of you, there is a library amount of science that documents Global Warming and Climate Change. If you don't believe science, then, I wouldn't get on an airplane which uses the science of physics, chemistry, metallurgy and aerodynamics (among others) to make sure your plane stays in the sky.

If you need documentation of the fact of Global Warming, see these articles, the first of which impacts New Orleanians directly:

OK, Professor Oil, now I know I am dealing with someone with at least a cursory knowledge of the subject. Not bad. So, you are saying that Obama ISN'T the cause of high gas prices? Huh. I guess you are going to tell me he ISN'T a Muslim and that evolution is, scientifically speaking, fact. OK, maybe that's going too far.

Oh I'm no professor oil, but as I have stated I know a great deal about it from personal experience and from talking to people who DO know a great deal about it. First hand. What I know wasn't filtered by a political party, a web site editor, or for the sake of all this is holy the NY Times. I could give a frogs fat green ass whether or not Obama is a Muslim. As for evolution, my view is actually extremely simple. It's my view and none of your business though. I only have those conversations with reasonable people.

As to the role of speculators, they only magnify the speed and size of the price movement, but not the direction. As your Econ 101 professor taught you, when demand outstrips supply.....price will go where? That's right, it will go up. Where have gasoline prices gone over the last 40 years?

Well, we have a revelation! Oil costs more now than it did 30 years ago! WOW! So does soda pop. Oh my GOD we're running out of Soda Pop! And Toothpaste! And Rubbers! Run for the hills. Interesting huh? The fundamental problem with you is that you believe demand is higher than supply. It is not. Believe whatever you wish - Stay on your current course of thinking and continue to be wrong. Fine by me.

Shame on you SaintFan for not telling these good people the truth. We are headed for higher and higher gasoline prices because consumption of oil is outstripping supply.

Nope. You can lead a horse to water...etc. That's what the liberal media wants you to believe. Congratulations! You're a member of the club! There is plenty of oil in the world and you yourself said as much in the "Condon" thread. You'd do better to pick a side and stick with it. That's what Pelosi does.

But, there are three main areas that you did not cover, which I have outlined here:

1. Peak Oil Happened in 2008

For all of you who know that oil is a finite natural resource, meet me at the next paragraph. For those of you who believe in biblical-based oil, please see this article and I'll pray for you.

In 2008, the world consumed 5.3 million barrels more oil than it produced. That was a shortfall equal to the daily oil production of Kuwait and Iraq combined. By 2035, the projected shortfall will be 12.1 million barrels per day -- which is more than all the oil produced by Saudi Arabia per day.

I did speak to it. Certainly there is less now than before. There will be less tomorrow than there is today. This has precisely nothing to do with what you're playing at the pump. Not a single thing. That is what we (some of us anyway) are discussing. Get on point will you?

In 1956 M. King Hubbert, a geologist for Shell Oil, predicted the peaking of US Oil production would occur in the late 1960s.
Although derided by most in the industry he was correct. He was the first to assert that oil discovery, and therefore production, would follow a bell shaped curve over its life. After his success in forecasting the US peak, this analysis became known as the Hubbert's Peak.

The amount of oil discovered in the US has dropped since the late 1930s. 40 years later, US oil production had peaked, and has fallen ever since.

World discovery of oil peaked in the 1960s, and has declined since then. If the 40 year cycle seen in the US holds true for world oil production, that puts global peak oil production, right about now; after which oil becomes less available, and more expensive.

You can copy and paste with the best of them. Word to the wise: Quote that stuff when you do. You know you fully understand a topic when you can put it in your own words. Know what I mean? The point you continue to fail to grasp (willingly I suspect) is that peak oil, supply and demand, all that crap, has NOTHING to do with why oil prices have increased dramatically over the last month. Let me try and drill this point home (pardon the pun). NOTHING TO DO WITH IT. Let that sink in and see if you can get back on topic.

In 2010, total oil, gas and coal subsidies to fossil fuel Big Energy was $15 BILLION. That's billion with a "B". Below are just a few of the tax credits and subsidies that these companies took advantage of. At the same time, ExxonMobil, in 2010 -- made $30.46 billion in profit!@!@#%^! That is just pure PROFIT.

If you are worried about the U.S. federal debt, call your US representatives and demand that these tax loopholes and subsidies to Big Fossil Fuel be CLOSED immediately.

And herein lies the real agenda. You hate oil companies. I mean, I knew this before we got started, but here it is in the open. Let me ask, do you hate ALL corporations? I bet not. At the very least I bet you don't spend any time blaming them for all the worlds problems. See the "Condon" thread for your homework assignment. It is enough to say in a single post in a single thread "I LOATHE BIG OIL COMPANIES". We get it. You can save a little face that way and many people will agree with you. But when you embark on a mission to pin the price of a gallon of gas on the mean old oil companies you have a dig WAY deeper it seems than you are willing to do.

Yes, there are politicians who fight Wall Street. Obama is one of them. But, that is a different topic.

For those of you who believe that global warming is a hoax, please keep your head placed firmly up your @ss.

For the rest of you, there is a library amount of science that documents Global Warming and Climate Change. If you don't believe science, then, I wouldn't get on an airplane which uses the science of physics, chemistry, metallurgy and aerodynamics (among others) to make sure your plane stays in the sky.

If you need documentation of the fact of Global Warming, see these articles, the first of which impacts New Orleanians directly:

And here's the motivation for your big oil hate. This is nothing new. You subscribe to a theory (and I'm sorry to tell you it's nothing more than that) wherein you are able to blame some big corporation for some possible worst case scenario. You need a fight. This is common among liberals - young ones especially. Most grow up and grow out of it. Some never see the light. They're the ones trying to ban toys from happy meals.

And do we really need to have the 'global warming' battle? Let me tell you how that will end. You will copy and paste a million articles from every source you can find (and there are many) and claim that this proves your point. You will have to copy and paste because you don't have the education to look at all the data it takes to make an intelligent assumption, and even if you did all you would be able to do is assume. This is all the scientists you're quoting are doing. I might be inclined to do the same, meeting every article with one that counters its point. This will go on and on and eventually the topic will be closed and you will have failed to prove a damn thing. Instead I will simply say "Prove it". Do it right now. Don't quote a theory. PROVE IT. You can't. Nobody can. Believe as you wish and sleep will at night, because your opinion of global warming doesn't affect me in any way. Matter of fact, I'd be willing to be my carbon footprint is less than yours. But who cares? The plant is going to be here when we die. It will be here for my kids and for their kids. The only problem I see is that my kids and their kids are going to have to pay for the liberal policies you support that are not sustainable. Let's just agree not to do that okay?

Back to topic - next time my ex bro-in-law or my father-in-law or my grandpa is in town, if you're interested, I'd be more than happy to set up a little meeting. Each works or worked in the oil industry as I've stated. Do you want to hear it from the horses mouth, or would you prefer to stay in the matrix? You can read this too if you'd like. http://money.howstuffworks.com/oil-s...gas-price1.htm You want the red pill or the blue one? Up to you little lady.

First, the point I am making is entirely unrelated to the increase in the price of gasoline over the last month. It is ludicrous to try to understand this problem from that microscopic perspective. But, if it helps, I agree with you about the repercussions of Wall Street speculation with respect to it being a partial influence on the price of oil, and that oil is a world-market commodity.

You are still trying to mislead the people here about world oil supply. That is shameful. The FACT that the world is running out of oil should be obvious, since we are now trying to dig it out of shale and even Canadian tar sands -- both of which are dramatically more expensive to recover and refine than Brent Blend or WTI. This leads me to question whether you are an oil company shill or simply ill-informed.

While you indict my political beliefs and factual analysis -- you didn't even try to debate the information I quoted. And, yes, I quoted the information because I don't try to make up the facts. We pay people, called scientists, to try to find as best they can, what works most of the time. That is what science and scientific research DOES. It is not perfect because we don't live in a world where perfection happens very often.

What you HAVE proved to me is this, you are a card carrying member of the "Facts Are Optional" Party. For you, anecdotal evidence and what your gut tells you is good enough. So, if I were you, I wouldn't go to a doctor or stand on the edge of a tall building ( science doesn't know how gravity actually works either, but your own assumptions might tell you that you can fly ). Perhaps you didn't get the memo, but, without science, we would not have put a man on the moon. Or are you a moon landing denier, too?

I have a question for you: Are you aware that under the Bush Administration American scientists were threatened with being fired ( and some of them were fired and black-balled ) if they published research which showed that global warming is caused by the CO2 producing activities of humans?

Have you seen video of the air pollution in China and Thailand? This is what happens when you have no EPA. The EPA depends on science to determine why air pollution happens and how many Americans will die, each year, depending on how filthy we allow the air to become. It also uses science to help determine how to clean up the air and prevent further air pollution. Do you notice that LA has much better air than it did in the 1970s? There is absolutely no debate here. It really doesn't matter what your gut tells you or what "assumptions" you've made. It didn't happen by magic.

Left un-policed, Big Oil will argue that 150,000 deaths per year, due to heart disease (yes, heart disease is exacerbated by air pollution), lung cancer, COPD, asthma and emphysema is a small price to pay for American jobs. But, the REAL QUESTION IS what do you say SaintFan? Because these are the questions that are incumbent upon us as individual Americans to answer. Is your and your families' health & quality of life more important than Big Oil's profits? Shall we allow Big Oil ONLY to influence energy policy? Or will we decide what our own priorities are, as Americans, and as human beings, who need to breathe clean air?

I don't hate corporations, I simply understand their raison d'etre, which simply is this: to make a profit. They have no other reason to exist. But, human beings care about MUCH MORE than that. We care about our children and their health, and our own health. We care about safety, and beauty, and truth and fairness and justice and peace. So, I merely accept the fact that corporations and human beings often have competing interests. They lobby for what they need and want -- and we lobby for what we need and want.

So, yes, SaintFan, we DESPERATELY need to have the GLOBAL WARMING discussion. There is no point in battling about it. It is happening, right now. Just tune your TV away from FAUX News. There is vitally important information out there -- all you need to do is look at it with an open mind. The sea level is rising. Global temperatures are rising. US weather is causing more damage in inflation-adjusted dollars than at any other time in history -- but you would have to actually read some technical articles to know this. Since you have children, do it for them.

I am going to exit stage left. I don't have conversations with most people about religion because most people simply believe what they believe and aren't very interested in WHY someone else believes what THEY believe.

I'm different. I enjoy learning about why someone believes a certain thing. Oh I used to argue it with venom, but I got a little older, a little wiser, and learned that it is far more interesting to openly debate such a topic with someone than it is to get into a flat-footed argument with them.

As for the price of oil and further a gallon of gas, there is no point in me arguing with someone who isn't willing to accept facts. There is no point in me arguing with someone who, to bolster their point, quotes Wikipedia and uber-liberal Op Ed nonsense. I cannot have a discussion, and I cannot hope to teach or explain. It is true that some people cannot be helped. This is true of the ultra-conservative as well as the ultra-liberal in the political arena, just so we're clear.

I do want to speak about the attempt to insinuate that I am purposefully misleading people about peak oil. I am doing no such thing. This is a sad tactic that is being used here by someone who is trying to win an argument with old statistics and no experience in the field AS WELL AS no 1st or even 2nd hand insight. The only knowledge you have of that which you preach is from Government sites and other's who's political agenda is easily exposed with little or no effort. If you're comfortable with that then fine by me. I prefer real information as opposed to piling on to some agenda because I like the sound of their catch phrase.

This discussion was (before it became bastardized) about why gas prices are so high. It was asserted by my primary foe in this debate that Peak Oil was all anyone needed to know. It is MY asserting that Peak Oil has precisely nothing to do with why gas prices are all over the place OR why we are about to break pricing records across the country at the pump. NOT ONE SINGLE THING DOES PEAK OIL HAVE TO DO WITH IT. It was later stated by my counter in this discussion that domestic drilling was the answer, but this came after my challenger blasted another poster for calling out Pelosi for her disdain for increased domestic drilling. Clearly you can't figure out whether to scratch your watch or wind your ass, so why waste any more of my time trying to get you educated when you're just here for the fight?

I have stated that there is no shortage of oil. There isn't. I stand by that statement because of a number of things I know, but mostly because (a) API is certain (and they are the pros) there are as of yet undiscovered resources, and in fact every now and then this proves to be true and is easily observed by anyone who's paying attention and (b) I happen to know two people who specifically drill for oil for their living. They went to school for it. They are working in the industry every day. They have access to information none of this hogwash being posted here as evidence of a point has. THOSE people tell me its a farce. It's a scare tactic. It's all by design. I have other friends and relatives who do or have done everything from pipeline work in refineries and the middle east to off shore drilling in the Gulf of Mexico, The North Sea, South America, and other places all over the world. I believe these men because they have no dog in the race. I believe them because they have perspective. I believe them because I've frequently listened to them counter the scare tactics the Politicians put forth - aimed at people JUST LIKE YOU. Sadly it works, but it's like the Jedi mind trick. It only works on the weak minded.

Now, Who_Dat_Cat, let me tell you a little something about me personally. I don't watch 'faux' news as you call it. I don't watch CNN. I watch local news on KRON 4 and ONLY because I want to know what the weather is going to do and because I think Justine is HOT and sometimes to learn about the latest violent death that you also don't believe happens here in the Bay Area. That's it. You have mistaken me for a extreme conservative, and I can assure you I am not. I watch PBS with my kids and I listen to NPR every morning. But where I get most of the information that shapes my opinion on things is by talking to people who know more about them than I do. I've had professors who tried to settle me in to their agenda - their view of the world. I'm not the sharpest tool in the shed, but I'm smart enough to see that coming. It's too bad that you and others like you are not. I have been extremely fortunate to have grown up on a military base and to have worked in jobs that have allowed me to get to know and to learn from people all over the world. So when I want to know how the Russians felt about American during the cold war I talk to some Russians. When I want to know what India thinks about America in the middle east I go ask an Indian. If I wanted to know what an uber-liberal thought about something I could just ask you. You, on the other hand, look to politically-laced government propaganda and Liberal Op Ed pieces written by legal professionals who found ultra-left-wing broadcasting entities.

Network TV is another great place for the liberal agenda. No, your agenda is not new to me. If you never spoke another word to me I'm fairly certain I could peg your stance on just about anything, because all I'd have to do is turn on the CBS, NBC, or ABC news casts. On the other hand, you make far too many assumptions to have any hope of responding in kind. You, if I may be so blunt, are indoctrinated - completely and irreversibly I'm afraid. That's fine. Lot's of people are. It's sad, but you are fed the liberal agenda and you swallow it whole just as many people are fed the conservative agenda and swallow that whole.

I'll finish now, but before I go I'll just add this one thing: There is exactly ZERO factual evidence that proves Global Warming. In fact many of the predictions made by these scientists you speak of have failed to materialize and in some cases are even reversed. I'm not saying we shouldn't protect the environment. That's a worthy effort to be sure. I teach my kids to recycle. I teach my kids about conservation. I teach my kids about respecting forests and the wildlife that lives there. Matter of fact, there are a pair of endangered owls living on a construction site that MY KIDS reported to the Brentwood Press a few weeks ago. Look it up if you don't believe me.

No. You don't know a damn thing about me lady except what I have offered to you directly. And you don't know a damn thing about oil either. But that's okay. As an old Italian lady once told me, "It takes all kinds to make a world." Wise words indeed.

So, you only believe industry sources ...... OK, here is OPEC's World Oil Outlook for 2011.

In OPEC's World Oil Outlook for 2011, page 72, Figure 1.25 shows the drop off of OPEC crude oil supply starting in the 70s and going to 2035. They say it very clearly: "OPEC crude share in total world oil supply: 1973 51%, 2010 34%, 2035 36%", while, this report shows that demand will grow in the future, OPEC producing nations will only supply 36% of world oil supply in 2035. The chart also shows that "other sources of oil" will replace OPEC crude.

If OPEC had the oil to sell, tell me SaintFan, why would OPEC be projecting that "other sources of oil" will fill the gap in oil supply in 2035? Don't you think that OPEC would want to sell 51% of oil, instead of 36%, to meet demand, if they could? I think they would.

As I mentioned above, we are now beginning to extract oil from other, dramatically more expensive, fossil fuel sources, such as shale and oil sands. OPEC's report discusses it in detail, and uses these "other sources" to replace the loss from OPEC crude sources. They state, on page 69, in pertinent part: "...increases in conventional supply from the Caspian and Brazil, as well as steady increases in biofuels, oil sands and shale oil will more than compensate for expected decreases in mature regions." These other sources and their development will increase prices for gas due to the higher cost of development of these unconventional sources when compared to cost of production in "mature regions". These mature regions are where the oil reservoirs are being emptied. So, SaintFan, you appear to be the one listening to unreliable sources. But, I know you have a problem with scientific sources which you define as "leftist propaganda". But, tell me SaintFan, how is OPEC's report "left-wing propaganda"?

BTW, OPEC's report is based on science and compilation of facts and uses statistical modeling to come up with these numbers and projections. They are not quotes from your ex-brother in law, or other "people you know" who work in the oil industry.

And, interestingly, this report from OPEC, mentions global warming and climate change and takes it into consideration in their projections.

And, Danno, it makes no sense to feel sad about the energy predicament we are in .... but you can do something about it. First, get educated about this issue and then work hard to reduce your fossil fuel consumption, and reduce your carbon footprint. Then you can support subsidies for energy development of non-carbon-based energy sources.